DTCC and Digital Asset to develop repo blockchain
29 March 2016 New York
Image: Shutterstock
The Depository Trust & Clearing Corporation (DTCC) and Digital Asset Holdings, an encrypted straight-through processing solution provider, are planning to develop a distributed ledger-based solution to manage repo clearing and settlement.
The blockchain initiative will cover US treasury, agency, and agency mortgage-backed repo transactions that are matched and verified through DTCC’s Fixed Income Clearing Corporation (FICC).
FICC does not currently settle the start leg of same-day starting trades, meaning the settlement of a same-day repo start leg may occur in real time elsewhere.
“With this project, DTCC and Digital Asset seek to reduce risk and capital requirements for the repo market by enabling FICC to become the settlement counterparty for repo transactions in real-time, thereby allowing additional netting and offsets,” DTCC explained in a statement.
Mike Bodson, president and CEO of DTCC, said, “Distributed ledger technology has the potential to revolutionise certain post-trade processes that are inefficient and complex, and repos are a great place to start.”
“There are absolute opportunities to make clearing in this area much more efficient, and we look forward to working with Digital Asset on this exciting project.”
Blythe Masters, CEO of Digital Asset, added: “DTCC has an important role to play in the integration of a distributed ledger ecosystem with the existing financial landscape and this joint effort will accelerate innovation while decreasing cost and risk for our clients.”
“DTCC has an important role to play in the integration of a distributed ledger ecosystem with the existing financial landscape and this joint effort will accelerate innovation while decreasing cost and risk for our clients.”
The blockchain initiative will cover US treasury, agency, and agency mortgage-backed repo transactions that are matched and verified through DTCC’s Fixed Income Clearing Corporation (FICC).
FICC does not currently settle the start leg of same-day starting trades, meaning the settlement of a same-day repo start leg may occur in real time elsewhere.
“With this project, DTCC and Digital Asset seek to reduce risk and capital requirements for the repo market by enabling FICC to become the settlement counterparty for repo transactions in real-time, thereby allowing additional netting and offsets,” DTCC explained in a statement.
Mike Bodson, president and CEO of DTCC, said, “Distributed ledger technology has the potential to revolutionise certain post-trade processes that are inefficient and complex, and repos are a great place to start.”
“There are absolute opportunities to make clearing in this area much more efficient, and we look forward to working with Digital Asset on this exciting project.”
Blythe Masters, CEO of Digital Asset, added: “DTCC has an important role to play in the integration of a distributed ledger ecosystem with the existing financial landscape and this joint effort will accelerate innovation while decreasing cost and risk for our clients.”
“DTCC has an important role to play in the integration of a distributed ledger ecosystem with the existing financial landscape and this joint effort will accelerate innovation while decreasing cost and risk for our clients.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
